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CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers

In cost accounting, anything for which a separate measurement of cost is desired, such as a product, a service, a customer or a project, is called a:

The item for which cost is separately measured, such as a product, service, customer or project, is called a cost object. A cost driver only explains why cost changes, and a cost pool is merely a group of costs, so neither describes the thing being costed.

  1. ACost objectCorrect
  2. BCost driver
  3. CResponsibility centre
  4. DCost pool

Explanation

A cost object is any item for which cost is separately measured, such as a product, service, customer, project or department. A cost driver is a factor that causes cost to change, so it is not the item being costed. A cost pool is a grouping of costs, not the item being measured.

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